EU gambling market 'needs harmonised rules'

An EU-wide public consultation on the future of Europe's fast-growing online gambling industry, to be published by the European Commission tomorrow (24 March), must produce "harmonised rules" to govern the market, Sigrid Ligné, secretary-general of the European Gaming and Betting Association (EGBA), told EurActiv in an interview.

"Online gambling is a cross-border market. Consumption is cross-border as well. Clearly there's a strong need for harmonised rules," said Ligné, who is secretary-general of the EGBA, which represents such firms as bwin, Unibet, BetClic and Party Gaming.

"We think there is good momentum for the EU to assume strong leadership in this area," she added, drawing attention to the €10 billion European online gaming market.

But Ligné believes the EU has a long way to go before it can claim to have achieved a fully-functioning single market for online gaming and betting.

"For years now the issue has been brought up by the European Court of Justice or discussed in the EU institutions […] clearly now it's time for decisions," she said.

Commission to launch consultation tomorrow

EU Internal Market Commissioner Michel Barnier will launch a public consultation on online gambling services in the internal market tomorrow.

The consultation will seek to address "all relevant public policy challenges and possible internal market issues resulting from the rapid development of both licit and unlawful online gambling offers directed at citizens located in the EU," according to a draft copy of the Green Paper, seen by EurActiv.

Different national regulatory models for gambling co-exist across the EU as the European market is currently regulated by EU governments at national level. National markets tend to be dominated by strictly-controlled monopolies or licensed operators operating within heavily-regulated frameworks.

However, "the development of the Internet and the increased supply of online gambling services have […] made it more difficult for these different national regulatory models to co-exist," reads the draft Green Paper, which invites stakeholders to consider whether "greater cooperation at EU level might help member states to achieve more effectively the objectives of their gambling policy".

"Obviously today we're facing regulatory approaches that are very different from one member state to another," said the EGBA's Ligné, complaining that EU countries are "developing different requirements to achieve the same objectives".

She drew attention to the industry's tendency in the last few years "to move from a prohibitive or monopolistic approach to the market to a regulated approach," which she described as "a positive trend".

Towards an EU ‘common framework'

"We feel the EU has an important role to play in harmonising rules" and establishing "a common framework," Ligné said, adding that the European Commission should "fight the adoption or implementation of protectionist regulations in the member states".

The EGBA represents leading online gaming and betting operators that are based and licensed within EU jurisdiction and seeks to promote the development of fair regulations that take into account the cross-border and online dimensions of the industry.

"It's important from an internal market perspective and from a competition point of view that the restrictions that are enforced at national level are not hidden protectionist measures, and are there to serve the people and not to preserve national incumbents," Ligné said.

"There must be a fair competitive approach in the sector," she added.

She was echoed by Khalid Ali of the European Sports Security Association, which monitors irregular betting patterns in Europe, investigates whether they are suspicious or not, and alerts the relevant sports federations if necessary.

"Top of my list is really ensuring a competitive landscape, because this is what will give European bookmakers the edge over their international rivals," Ali, who is secretary-general of ESSA, told EurActiv in a separate interview.

According to him, online gambling will also help to support Europe in today's climate of innovation and competition, as EU companies "are leading the way" in coming up with new standards and new technologies, including security measures and online streaming facilities.

The EGBA's Ligné agreed that the industry can play a role in boosting the EU single market and achieving the goals of the bloc's Digital Agenda.

"There are lots of restrictions and barriers that still exist today in a number of member states. These are preventing our sector from achieving its full economic potential," she said.

Germany prohibits online gambling altogether, while other member states allow it but only under restricted circumstances, the industry representative explained. "Clearly better enforcement of internal market and competition rules in our sector would allow it to contribute fully to the European economy," Ligné said.

"Clearly it's a high-level technology area and therefore the policy challenges faced are a clear test case for the digital internal market," she added.

EU gambling industry ‘favourable to regulation'

Asked whether the Green Paper should lead to tighter regulation of the sector by Brussels, Ligné said the fast pace of innovation in a sector characterised by rapid technological development meant it was important for regulators to promote "self-regulatory efforts by industry to go beyond and develop best practice" of its own accord.

A self-regulatory approach will "ensure that customers can benefit from these innovations without necessarily waiting to be included in regulations that can sometime take more time to develop and to adopt," the EGBA chief said.

"Self-regulation or standardisation is very complementary to regulation. Whether at national or EU level, we feel that online gambling is a sector that needs to be regulated," Ligné stressed.

She drew attention to the industry's efforts to put in place rules and procedures to tackle the problems faced by online gambling firms, including money laundering, data protection and underage gambling.

"The Internet offers unique opportunities to develop safe and secure protection tools for online gamblers," Ligné said, pointing to easy access to 24/7 support services and technologies that verify the age and ID of players, ensure full transparency and traceability of transactions, and give users the opportunity "to set themselves their own limits and self-exclude" if necessary.

"That's evidence that […] workable solutions exist today, and we expect these to be the basis of discussion […] in the context of the Green Paper and possible solutions at EU level," the EGBA chief declared.

"Wherever there is an added value given the cross-border dimension, harmonised European solutions should be discussed," she added.

"There are also questions related to financial synergies between the world of sport and the world of sports betting. Gaming companies are among the top three sectors in sports sponsorship, and we feel that the two sectors have a natural interest in collaborating and developing partnerships," the industry representative added.

Background

The EU online gaming and betting market represented 45% of world market share in 2010, according to figures from the European Gaming and Betting Association (EGBA).

EGBA data also reveal that the EU online gaming and betting market represents 11% of the total European gaming market and was worth €10 billion GGR (Growth Gaming Revenue: stakes minus winnings) in 2010.

The sector is expected to account for 13% of the total market by 2012 (€2.5 billion GGR), putting it among the fastest-growing industries in Europe. But this growth is not detrimental to the traditional offline segment, which the EGBA expects to retain the lion's share of the total European market with 87% in 2012 and continue to grow in revenue terms, from €79.6 billion GGR in 2008 to €83.7 billion GGR in 2012.

The European Commission will launch a public consultation on the EU online gambling market on 24 March.

Positions

State lotteries have welcomed the European Commission's insistence that the Green Paper is not necessarily aimed at deregulating the online gambling sector.

"We are delighted with the European Commission's change of heart to enter into a real political dialogue with EU lawmakers – the member states and the European Parliament - rather than continuing to seek legal confrontation. This political process initiated by the Green Paper is by no means aimed at the deregulation (‘liberalisation') of online gambling, as Commissioner Barnier has publicly stated many times," European Lotteries President Friedrich Stickler said in a press release issued ahead of the publication of the Green Paper tomorrow.

Stickler urged the Commission to take into account public interest objectives like consumer protection, crime prevention and funding for sport and good causes, rather than merely supporting the commercial interests of online gambling firms.

"We are fully supportive of the European Commission's approach: recognise subsidiarity and accept the member states' wide margin of political discretion in gambling policy; recognise that gambling is not an ordinary economic activity; support proper regulation and its enforcement, rather than deregulation in such a sensitive and specific area; take into account public interest objectives – consumer protection, crime prevention and the funding of sport and good causes, amongst others – rather than support the purely commercial interests of hundreds of online gambling companies operating from Malta, Gibraltar and non-EU low-regulation and low-tax gambling hubs," he said.

"State lotteries are very aware of the importance of this Green Paper and we will put all our efforts into handing in a comprehensive submission to the European Commission's public consultation on it, responding to Commissioner Barnier's request to get the ‘best possible diagnosis' of the situation regarding online gambling," Stickler concluded.

Launching the online gamling Green Paper on Thursday (24 March), Internal Market and Services Commissioner Michel Barnier said: "With this Green Paper, we have launched an ambitious consultation with no pre-determined views on its possible follow-up."

"The online gambling market in the EU continues to grow rapidly and generates important revenues that are sometimes channelled into good causes. Its expansion must go hand-in-hand with a determination to protect our citizens, especially minors, and to ensure that offers of these types of services within the EU are sound and well-regulated," Barnier added.

"It responds to calls from the European Parliament and the member states for us to address these questions jointly. This consultation is not about liberalisation of the market: it is about ensuring that the market for online gambling services within the EU is well-regulated for all," he insisted.

It is a good start but does not put in place a clear EU framework for the development of safe and responsible online gaming, Harbour argued.

"Online gambling is a cross-border issue and it needs a clear EU framework in order to fulfil its potential. At the moment there is a patchwork of licensing regimes or state monopolies across the EU and a lack of clear legislation is leaving important decisions to be made by the courts," he said.

"Online gambling is one area where some EU legislation can be justified. If we do not set out a clear framework at EU level for legitimate and regulated online gaming we are only going to see further growth of unlicensed or black-market operators," the Tory MEP added.

"Through the CEN initiative the industry has shown that it is already working to improve standards and to provide consumer safeguards. This is very welcome and must be taken into account in any EU action," Harbour said.

"We should create a viable online gambling industry in the EU that is regulated well and regulated as consistently as possible across the single market," he concluded.

Adrian Morris, deputy managing director of Stanleybet, commented: "Although we are confident that the Green Paper will bring much-needed facts to the debate, we still believe that only if it is accompanied by the effective enforcement of the existing rules will the Commission demonstrate credibility and consistency in its approach to gambling policy."

Related Content

The rapid growth of online gambling is creating "a whole new audience" for European sport, argues Khalid Ali, secretary-general of the European Sports Security Association (ESSA), in an interview with EurActiv, calling on policymakers to help create "a supportive climate" for betting companies.

With the European Commission readying its Green Paper on online gambling, the recent cricket betting saga highlighted the need for European regulation that will allow bookmakers to continue to innovate and maintain their integrity, writes Khalid Ali, secretary-general of the European Sports Security Association (ESSA), in an opinion piece sent exclusively to EurActiv.

An EU-wide public consultation on the future of Europe's fast-growing online gambling industry must produce "harmonised rules" to govern the market, Sigrid Ligné, secretary-general of the European Gaming and Betting Association (EGBA), told EurActiv in an interview.

An upcoming EU-wide public consultation on the future of Europe's rapidly-growing online gambling market must create a "competitive landscape" for betting firms, Khalid Ali of the European Sports Security Association (ESSA), told EurActiv in an interview.

Policymakers and operators alike are broadly in favour of introducing EU-wide legislation to govern the online gambling market. But common rules should not prevent member states from regulating online gambling as tightly as they want, participants in a European Economic and Social Committee conference heard yesterday (6 September).

Plans for an EU-wide legal approach to match-fixing and money laundering in sport are under way, with the European Parliament committee on mafia and organised crime holding a debate on the issue yesterday (17 September).

Despite opposition from tiny EU member Malta, whose gambling industry brings it substantial tax revenue, EU ministers on Tuesday agreed a common definition of illegal gambling, taking the first step towards possible European regulation on the matter.

EU countries can ban online gambling if their aim is to combat fraud, Europe's highest court said on Thursday (3 June), dealing a blow to the multi-billion euro online betting industry, which is seeking to break domestic monopolies.